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Background Information

Denmark has a long history of citizen ownership and is one of the EU countries with the highest share of citizen ownership of energy assets.  A study from 2019 estimated that 52% of the existing installed wind capacity in Denmark in December 2016 was owned through some kind of citizen ownership model.  At the time wind energy produced 37% of the final electricity demand in Denmark and although the authors of the study emphasised the uncertainties in the analysis, they conclude that citizen ownership has contributed greatly to the implementation of Danish wind turbines in 1977–2016 (Gorroño, Sperling & Djørup, 2019).
Haugaland Kraft (n.d). An island self-sufficient on renewable energy. Available at: https://hkraft.no/fou/
In a study commissioned by the Nordic Council of Ministers and published in 2019, Denmark was estimated to be the Nordic country with the highest distributed electricity production for potential self-consumption in 2017. It was estimated that Denmark produced over 3.6 TWh, approximately 79% of what was produced in all of the Nordic countries. Most of this electricity stemmed from wind power (Krönert et al, 2019).
Krönert, F., Henriksen, G. L., Boye, S., Edfeldt, E., Weisner, E., Nilsson, M. F. & Uusitalo, O. (2019). Distributed electricity production and self-consumption in the Nordics. Available at: https://www.nordicenergy.org/wordpress/wp-content/uploads/2019/06/Distributed-energy-production-and-self-consumption-20190607-1.pdf
In 2020, 31.7% of Denmark’s energy consumption consisted of renewable energy and wind power's share of domestic electricity supply was 47% (Energistyrelsen 2022).
Energistyrelsen (2022). Energistatistik. 2021
All in all, this paints a picture of a rich history of both citizen engagement in energy production and in energy production through wind power.
In a recently published overview of European Energy Communities, it is estimated that there are 633 Energy Communities in Denmark, with a majority (467) subsiding in Jutland (European Commission n.d), (Wierling et al, 2023).
Wierling, A. et al. (2023) ‘A Europe-wide inventory of citizen-led energy action with data from 29 countries and over 10000 initiatives’, Scientific Data, 10(1). doi:10.1038/s41597-022-01902-5.  
Compared to the other Nordic countries included in the overview (Norway, Sweden and Finland), Denmark has more Energy communities than the other three countries combined. It should be noted that the overview applies a broader definition of Energy Communities than the definition for both CECs and RECs. However, it gives an indication of the deployment of citizen led energy initiatives, in relation to the neighbour countries. One explanation to the comparatively large deployment of energy communities could be the aforementioned history of both citizen ownership and wind power in Denmark. Another explanation could be the Danish dependence on fossil fuels in the electricity production, which was 26% in 2021(Rosado & Ritchie, 2021).
Rosado, H.R. and P. (2021) Energy: Key charts, Our World in Data. Available at: https://ourworldindata.org/energy-key-charts (Accessed: 23 May 2023).
The main public bodies regulating and supervising the Danish energy market are the Danish energy agency (DEA) and the Danish Utility Regulator (DUR), both answering to the Ministry of Climate, Energy and Utilities. DEA has the main responsibility for tasks linked to energy production, supply, and consumption. DEA is also responsible for the Danish efforts to reduce carbon emissions as well as supporting the economic optimisation of utilities that, in addition to energy, includes heat, waste, and water. DUR is responsible for securing consumer interests in the utility sectors (electricity, district heating and natural gas) by striving for a higher level of efficiency, the lowest possible costs in the short and long term, a stable and secure supply, and a cost-effective development in technology and climate-friendly initiatives.

Models for Energy Communities & National Legal Framework

The main laws regulating Energy Communities are the law on promotion of renewables (lov om fremme af vedvarende energi) and the law on electricity supply (elforsyningsloven). RECs were included into the law on promotion of renewables in 2021 and in the same year the definitions of both RECs and CECs were set in an executive order which added to the law on electricity supply. Although the legislation discerns between CECs and RECs, the distinction is seldom used in the general discourse. Real-life communities are mostly referred to as Energifælleskaber (Energy Communities), rather than being differentiated as Borgerenergifællesskaber (Citizen Energy Communities) and VE-fællesskaber (Renewable Energy Communities).
The two main models for electricity sharing in Denmark are behind the meter and through the collective grid. Electricity sharing behind the meter is restricted by regulation, making it a solution only applicable within a single building. For example, in the case of a housing cooperative (andelsboligforening) in a building with rooftop PV. Sharing through the collective grid is the only option for other types of communities. Currently electricity sharing through the collective grid is subject to the general tariffs and taxes. However, new tariff legislation has recently been passed, which enables DSOs methods for tariffing energy communities according to their contributions to the collective grid.
An energy community can be organised as an association, partnership, cooperative, or capital company. Often the communities are initiated through already established groups of people, such as municipalities, housing cooperatives (andelsboligforeninger) or eco-villages (økosamfund). Both the preconditions and motives often differ between these groups, resulting in different choices of model for the community.
One common type of community in Denmark is so called Eco-villages (økosamfund), which are usually organised as a communal institution with collective ownership. They often have an overarching motive to obtain self-sufficiency and contribute to sustainable living, also beyond energy consumption and production. The focus is often on heating, of which sharing is not as heavily regulated as sharing of electricity.
Another form of current Energy Communities is housing cooperatives that have installed either PV or hybrid solutions of both PV and heat pumps. Under current regulations community members within one building are able to share the produced electricity internally without using the collective grid.
There are also examples of villages as well as newly established neighbourhoods organised as Energy Communities. These neighbourhoods are often placed so that they can use adjacent areas to produce heat or set up wind turbines. For these, larger types of communities sharing through the collective grid is the most relevant model for electricity sharing.
In August 2022, an executive order on subsidies for local energy communities and local anchoring of the climate transition was passed. The executive order provides for the DEA to issue grants for projects related to developing renewable energy projects by local communities. The purpose of the grants is partly to support information projects that can disseminate information, which can contribute to the development of renewable energy solutions, and partly to support larger projects that can develop common solutions for the establishment, organisation, operation and financing of energy communities locally, and which can increase knowledge of the energy communities (BEK 1162, 2022).
BEK nr 1162 af 09/08/2022: Bekendtgørelse om tilskud til lokale energifællesskaber og lokal forankring af klimaomstilling: https://ens.dk/sites/ens.dk/files/Stoette_vedvarende_energi/bekendtgoerelse_om_tilskud_til_lokale_energifaellesskaber_og_lokal_forankring_af_klimaomstilling.pdf

Legal and Practical Barriers

Legal Barriers

One of the presented obstacles for additional deployment of energy communities that reoccurs across literature and many interviews is insufficient opportunities for efficient and cost-effective electricity sharing. Currently, CECs and RECs are not allowed to operate their own distribution networks. While, at the moment, electricity sharing through the collective grid is subject to the general tariffs and taxes. However, enabling tariff models are being proposed and a renumeration or incentivising system for energy sharing is currently being developed and assessed.
As is stipulated in the current EU directive, the creation of an internal grid or microgrid by an energy community would also mean that the energy community would need to adhere to both the role and responsibility of a DSO, including the obligation to ensure third party access. The reluctance to grant CECs and RECs the role of DSO seems to stem from a general concern regarding parallel grids and the risk of either erosion of the collective grid or an undue economic burden for citizens who are not members of an energy community.
One solution to mitigating the economic effects of sharing community electricity through the collective grid was presented in an analysis by DEA published in December 2021. The solution would consist of a local collective tariffing for energy communities, enabling tariffs tailored by the respective community’s contributions to the collective grid (Energistyrelsen 2021).
Energistyrelsen (2021), Analyse af geografisk differentierede forbrugstariffer og direkte linjer, https://ens.dk/sites/ens.dk/files/El/analyse_af_geografisk_differentierede_forbrugstariffer_og_direkte_linjer.pdf
Consequently, this was presented in a legislative proposal that was recently passed (Hoeringsportalen 2022).
Hoeringsportalen (2022) Fornyet Høring af lovforslag om ændringer af lov om elforsyning. Available at: https://hoeringsportalen.dk/Hearing/Details/66808
(Accessed: 23 May 2023).

Practical Barriers

The knowledge, both technical and juridical, necessary to establish an energy community is presented as a deterrent. This is most likely exacerbated by the fact that, at the time of the data collection for this study, the surrounding enabling framework was not fully established and implemented, leading to some uncertainty on what are, and will be, the preconditions for an energy community. Vis a vis the more exact return of investment calculations and the like for specific business cases.
The need for juridical and technical competence act as a threshold for people who are not knowledgeable in this specific area or are particular enthusiasts willing to spend a large amount of time and effort into understanding the context. The general knowledge, or rather lack thereof, of one’s own energy consumption and energy sources is also presented as an incentive lost due to unawareness. There is access to counselling and every Danish consumer has access to real-time data regarding consumption. However, there may be a discrepancy between the knowledge available, the use of the information sources and the awareness of its existence. Relating to the need for knowledge is understanding and navigating the bureaucratic process surrounding the energy market as well as having an understanding of the processes for permits and complaints as well as the possible response times from various agencies.
Another issue presented is that the main contact point for an energy community is the respective network operator since it provides the connection and decides on the type of tariff to pay, whether it is a production or consumption tariff. This can at times be a bit controversial since they have a monopolistic role and the propensity to aid and inform can vary between different DSOs and their general attitude towards energy communities.
The technological aspects for the implementation of energy communities seem to be in place and are not mentioned as a barrier in any interview on the contrary it is occasionally emphasised that it does not pose an issue.

Examples of Real-life Communities

In the following, examples of energy community initiatives in Denmark are presented:
  • Example 1, Karise Permatopia, is an eco-village that has developed a common geothermal heating system based on locally produced energy from renewable sources.
  • Example 2, Avedøre, is Denmark’s first citizen energy community. The community has initiated several projects to develop the production and storage of renewable energy.  
  • Example 3, Københavns solcellelaug, was Denmark’s first solar cell association where citizens can buy shares in urban solar cell plants.
Karise Permatopia is an eco-village located in the town of Karise in the southeast of Denmark. The community consists of 90 terraced houses and is focusing on sustainability in all aspects of its operations, including being self-sufficient on energy. Permatopia has a specially appointed energy supply group, responsible for making the communities energy supply 100% renewable. The community’s ambition is to be a circular energy system of its own to the greatest extent, so that the usage of energy from waste can be optimised. All houses, and large parts of the communal yard, which is operated by the community, are heated with a common geothermal heating system. Permatopia also owns and operates a wind turbine that produces electricity for the geothermal heat system, the communal yard, and charging stations for electric cars in the community. Excess heat from the system further contributes to heating water for residents and the communal yard (Permatopia, n.d).
Karise Permatopia (n.d). Experience Permatopia. Available at: https://permatopia.dk/.
Avedøre A.M.B.A is Denmarks first citizen energy community, based in the district of Avedøre, in Hvidovre municipality, south of Copenhagen (EBO Consult, n.d).
EBO Consult (n.d). Denmark’s first energy community. Available at: https://eboconsult.dk/en/2020/06/08/denmarks-first-energy-community/.
The community was founded in 2020 by actors from various parts of the local society, such as Hvidovre Municipality, Hvidovre Gymnasium, the local heating company Avedøre Fjernvarme A.M.B.A., and the consultancy EBO Consult A/S, that has specialised in implementing energy communities.

Avedøre A.M.B.A is part of a development plan called "Avedøre Green City", where local stakeholders are collaborating to develop sustainability-related measures in the district, as part of the UN’s 17 global goals. One of the measures that have been implemented is the instalment of 60 solar panels, which are used to heat water for residents within the area. In 2021, the community also installed two charging stations for electrical vehicles that is powered by solar panels, mounted on station’s roofs.

The project was funded by Hvidovre Municipality in 2020 and developed together with European Green Cities and Solar Lighting Enterprise ApS. The project is part of the EU-project POCITYF, that is supporting projects aiming at making Europe’s cities smart and sustainable. The community is now considering to install more solar powered charging stations in Avedøre (POCITYF, 2021).
POCITYF (2021). Charging points under power generating roofs in Avedøre Green City ready for use. Available at: https://pocityf.eu/news/charging-points-under-power-generating-roofs-in-avedore-green-city-ready-for-use/?cn-reloaded=1
Established in 2005, Københavns solcellelaug is Denmark’s first solar cell association, where private citizens could buy shares. Due to a high demand, all of the association’s shares were sold within months. The association owns two urban solar cell plants in Copenhagen that produce renewable electricity for the shareholders. The overarching purpose of the association is stated to be to spread knowledge of solar power and its use in Denmark, and to produce energy for its members (Solcellelauget, n.d).
Solcellelauget (n.d). About the organisation. Available at:  http://www.solcellelauget.dk/om_lauget.htm 

Drivers and Benefits

The incentives for establishing or joining an energy community are often presented as ideological and/or financial. In the interviews, there is often an emphasis on sustainability and an intent to increase the production and consumption of renewable energy alongside the economic benefits for the members. It varies which of the motives that gets the strongest emphasis. One interviewee expresses it like this:
“The driving force is foremost, as we see It, to contribute to a sustainable transition. There are financial incentives, of course, but that's not the most important thing.”
Another interviewee mentions both motives but in the opposite order of priority:
“The benefits are mainly economic, it will be cheaper by implementing this. You also get a greener energy supply. We can establish local energy sources.”


The high energy prices in recent years increase the financial incentive. Both through energy savings and decreasing the length of the repayment period for investments in energy solutions.
Furthermore, the interviews indicate that a personal perception that the transition of the energy system is moving too slow, can act as a driver to take matters in one’s own hands and contribute to the acceleration of the transition.
Recently a financial pool has been implemented, which may contribute to decrease the financial risk of starting an energy community (BEK 1162, 2022).
BEK nr 1162 af 09/08/2022: Bekendtgørelse om tilskud til lokale energifællesskaber og lokal forankring af klimaomstilling: https://ens.dk/sites/ens.dk/files/Stoette_vedvarende_energi/bekendtgoerelse_om_tilskud_til_lokale_energifaellesskaber_og_lokal_forankring_af_klimaomstilling.pdf


For members
  • The aforementioned incentives are also closely related to the benefits to the members in the energy communities. The monetary savings alongside a fulfilment and pride from contributing to the sustainability transition.
Environmental benefits
  • Helps to accelerate the energy transition through:
    • A higher rate of decentralised installations of RES.
    • Less transport losses due to local production and consumption.
    • Decreased energy consumption due to higher awareness of the consequences of energy consumption among the community members.
  • Citizen ownership and inclusion are presented as correlated to an increase in general climate awareness and responsibility. This goes beyond energy solutions and includes other mitigating factors on climate change.
  • Increased acceptance of renewable energy. As previously mentioned, there has been an increase in public resistance towards wind turbines and PV-installations. This seems to be lessened through local initiatives.
For the collective grid
  • Grid congestion alleviation: because the energy communities use the locally supplied energy locally as well, the energy communities can play an important role in balancing the local electricity net, if implemented in an appropriate manner. This can help alleviate bottlenecks through decreased transportation needs.
  • Increased resilience in the system.  A more distributed system with regional and local backups could increase the resilience of the energy systems. Among other things, this would decrease the effects of a potential attack on the collective energy supply system, providing alternative sources for energy production.